Your Company Rents Out Computers to Local Businesses and Schools

question 114

Multiple Choice

Your company rents out computers to local businesses and schools.You have 1,000 computers with a net book value of $160,000.As a result of changing technology,your computers are more difficult to rent so you must severely reduce your rental price,which causes a decrease in estimated future cash flows.The fair value of the computers is estimated to be $125,000 because of their outmoded technology.Your company should report an asset impairment loss of:

• A)$160,000.
• B)$125,000.
• C)$35,000.
• D)none of the answers are acceptable.

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Definitions:

Generalization

The process in which a response is elicited by stimuli that are similar to the original conditioned stimulus in classical conditioning.

Flooding

Flooding is a psychological treatment method where an individual is exposed to a large amount of their fear object or context until the fear diminishes.

Systematic Desensitization

A behavioral therapy technique used to reduce phobic responses and anxiety through gradual exposure to the feared stimulus while practicing relaxation techniques.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.